Overnight Markets: Wall Street retreats despite positive earnings forecasts

With no big US economic data releases yesterday, equities declined despite better-than-expected outlooks from Hewlett-Packard and Fedex amid concern that Europe’s debt crisis will deteriorate.

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by Himanshu Singh on Sep 30, 2010 at 04:30

Wall Street declined on Wednesday despite positive outlooks from Hewlett-Packard and Fedex amid concern that Europe’s debt crisis will deteriorate.

The Dow Jones industrial average shed 23 points, or 0.21%, to 10,835. The Standard & Poor's 500 Index dipped three points, or 0.26%, to 1,145. The index has jumped 9.1% so far this month. The Nasdaq Composite Index fell three points, or 0.13%, to 2,376.

Investors focused on earnings forecasts for companies from Hewlett-Packard to Fedex on a day with no big US economic data releases.

Hewlett-Packard surged 2.2% after interim chief executive Cathie Lesjak said the company expects 2011 earnings excluding costs of $5.05 to $5.15 a share on sales of $131.5 billion to $133.5 billion. FedEx gained 2% after chief executive Fred Smith said and he was optimistic about the company’s prospects next year.

Family Dollar Stores climbed 1.6% after the discount retailer unveiled a quarterly profit that beat analysts' estimates and issued a bullish outlook. BP’s US-listed shares rose 1.8% to $40.00 after it said it had fired Andy Inglis, the head of its exploration division, and unveiled plans to restructure its safety operations.

On the downside, JPMorgan Chase plunged 1.4% and Wells Fargo fell 1.2%, leading a decline in financials. Morgan Stanley and Goldman Sachs edged lower after Meredith Whitney cut her full-year earnings estimates on the banks for 2010 through 2012.

In current trading, Asian stocks declined on Thursday amid European debt concerns and after Nintendo Co. slashed its profit estimates.

The MSCI Asia Pacific Index trimmed its biggest monthly gain since May 2009 by declining 0.6% to 127 as of 10:56 a.m. in Tokyo. Japan’s Nikkei 225 Stock Average lost 0.4%, Australia’s S&P/ASX 200 Index slid 0.8% and South Korea’s Kospi Index was little changed. Shanghai Composite Index gained 1% to 2,639.

In company news, National Australia Bank declined 0.6% after UBS slashed its investment rating. Nintendo Co., the world’s largest maker of video-game machines, plunged 9% in Osaka, Japan, after it cut its annual profit forecast by 55% and said it won’t release its 3DS handheld game player in time for the year-end holiday season.